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Bell, Florence C. (Florence Colfax), 1899- / Farmer co-ops in Wisconsin
([1941])
Mortgage credit and production credit available, pp. 48-49
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Production loans finance wide variety of farm needs, pp. 49-50
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Page 49
credit needs, the farmers themselves began to organize their own credit co- operatives to provide short-term loans. Beginning in 1923, production credit for farmers became available in some localities through agricultural credit corporations and livestock loan com- panies, some of which were formed by groups of farmers. The organization of these enterprises, however, was de- pendent upon local initiative, and many thousands of farmers were lo- cated in areas where none was formed because capital funds were lacking. In order to meet the need of farmers requiring short-term credit, Congress provided in the Farm Credit Act of 1933 for a Nation-wide system of production credit associations. Production Loans Finance Wide Variety oF Farm Needs Each year now thousands of Wiscon- da farmers borrow from their produc- fon credit associations for many pur- poses. Dairymen borrow to purchase dairy cows, equipment, and feed, and to finance improvements to barns. Because of the year-around nature of the dairy business, repayments are usu- ,llY made in regular installments from the milk or cream checks. Although nost dairy loans are made for 1 year, bhe unpaid balance, representing funds idvanced for purposes other than an- mal recurring costs, may be renewed at the end of that time provided the anuity and the borrower's repayment seord are satisfactory. Loans to produce fruit and vege- Ables, grain, tobacco, and other crops re made on a seasonal basis, the loans ebing repaid when the crops are har. rested and sold. The farmers who red cattle, hogs, and sheep pay their loans when they receive payment from the sale of the livestock financed. Wisconsin farmers are served by 21 production credit associations-at An- tigo, Baraboo, Barron, Chippewa Falls, Dodgeville, Elkhorn, Fond du Lac, Green Bay, Janesville, Juneau, Lan. caster, Luck, Madison, Mondovi, Neills- ville, River Falls, Sparta, Waukesha, Waupaca, Wausau, and Wisconsin Rapids. At the end of December 1940, the associations had over 10,500 loans outstanding for more than $5,800,000. Between organization and this date, they had made over 72,000 loans amounting to approximately $47,- 000,000. The Wisconsin production credit associations offer farmers' notes for re- discount to the Federal Intermediate Credit Bank of St. Paul, which, in turn, obtains funds through the sale to the investing public of its debentures, which are backed largely by the secur- ity of the farmers' discounted notes. By this plan the large money markets are made available to farmers at an interest rate comparable to rates paid by other industries. Thus, Wiscon- sin farmers have been able to obtain short-term credit at low rates. In March 1941, funds are being loaned at 4% percent per annum. Not only association members have benefited from this low interest rate, but also all those other farmers who have obtained short-term loans from other credit sources, which have reduced their rates to levels comparable to that of the production credit associations. The associations are chartered by the Governor of the Farm Credit Ad- ministration. Directors of the asso- ciations are elected from among local farmer-members according to the co- -49 -
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